`
`
`Thomas E. Hill (SBN 100861)
`thomas.hill@hklaw.com
`Christina T. Tellado (SBN 298597)
`christina.tellado@hklaw.com
`HOLLAND & KNIGHT LLP
`400 South Hope Street, 8th Floor
`Los Angeles, California 90071
`Telephone: (213) 896-2400
`Facsimile: (213) 896-2450
`Attorneys for Defendant
`TESLA, INC.
`(Additional counsel listed on next page)
`
`
`
`SUPERIOR COURT OF THE STATE OF CALIFORNIA
`
`FOR THE COUNTY OF ALAMEDA
`
`
`
`DEPARTMENT OF FAIR EMPLOYMENT AND
`HOUSING, an agency of the State of California,
`
`
`
`Plaintiff,
`
`
`v.
`
`TESLA, INC., doing business in California as
`TESLA MOTORS, INC., and DOES ONE through
`FIFTY, inclusive,
`
`
`
`Defendants.
`
`
`TESLA, INC., a Delaware Corporation doing
`business in California as TESLA MOTORS, INC.,
`
`
`
`Petitioner and Cross-Complainant,
`
`
`v.
`
`CALIFORNIA CIVIL RIGHTS DEPARTMENT,
`formerly known as DEPARTMENT OF FAIR
`EMPLOYMENT AND HOUSING,
`
`
`
`Respondent and Cross-Defendant.
`
`
`///
`///
`///
`
` Case No.: 22CV006830
`
`Assigned to The Honorable Evelio Grillo
`
`VERIFIED CROSS-COMPLAINT FOR
`DECLARATORY RELIEF AND WRIT
`OF MANDATE
`
`Compl. Filed:
`FAC Filed:
`
`Feb. 9, 2022
`March 11, 2022
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`Tel: 213.896.2400 Fax: 213.896.2450
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`Los Angeles, CA 90071
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`400 South Hope Street, 8th Floor
`Holland & Knight LLP
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`400 South Hope Street, 8th Floor
`Holland & Knight LLP
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`Los Angeles, CA 90071
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`Sara A. Begley (application for admission pro hac vice pending)
`sara.begley@hklaw.com
`HOLLAND & KNIGHT LLP
`2929 Arch Street, Suite 800
`Philadelphia, Pennsylvania 19104
`Telephone: (215) 252-9600
`Facsimile: (215) 867-6070
`
`Jeremy M. Sternberg (application for admission pro hac vice pending)
`jeremy.sternberg@hklaw.com
`HOLLAND & KNIGHT LLP
`10 St. James Avenue, 11th Floor
`Boston, Massachusetts 02116
`Telephone: (617) 523-2700
`Facsimile: (617) 523-6850
`
`Samuel J. Stone (SBN 317013)
`sam.stone@hklaw.com
`Mary T. Vu (SBN 323088)
`mary.vu@hklaw.com
`HOLLAND & KNIGHT LLP
`400 South Hope Street, 8th Floor
`Los Angeles, California 90071
`Telephone: (213) 896-2400
`Facsimile: (213) 896-2450
`
`Raymond A. Cardozo (SBN 173263)
`rcardozo@reedsmith.com
`Brian A. Sutherland (SBN 248486)
`bsutherland@reedsmith.com
`REED SMITH LLP
`101 Second Street, Suite 1800
`San Francisco, California 94105-3659
`Telephone: (415) 543-8700
`Facsimile: (415) 391-8269
`
`Tyree P. Jones Jr. (SBN 127631)
`tpjones@reedsmith.com
`REED SMITH LLP
`1301 K Street, N.W., Suite 1000
`Washington, DC 20005-3317
`Telephone: (202) 414-9200
`Facsimile: (202) 414-9299
`
`Attorneys for Defendant
`TESLA, INC.
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`Tel: 213.896.2400 Fax: 213.896.2450
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`Los Angeles, CA 90071
`400 South Hope Street, 8th Floor
`Holland & Knight LLP
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`Los Angeles, CA 90071
`400 South Hope Street, 8th Floor
`Holland & Knight LLP
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`INTRODUCTION
`
`1.
`Pursuant to Sections 428.10(b), 1060 and 1094.5 of the California Code of Civil
`Procedure (“CCP”), Petitioner and Cross-Complainant Tesla, Inc. (“Tesla”) brings this Verified
`Cross-Complaint for Declaratory Relief and Writ of Mandate (the “Cross-Complaint”) against
`Respondent and Cross-Defendant the California Civil Rights Department (“CRD,” formerly known
`as the Department of Fair Employment and Housing, or “DFEH”). The claims asserted in the Cross-
`Complaint arise in relevant part out of the same transaction, occurrence, or series of transactions and
`occurrences as those alleged in the First Amended Civil Rights Complaint for Injunctive and
`Monetary Relief (“FAC”) brought by CRD against Tesla. Through the Cross-Complaint, Tesla
`seeks a writ of mandate and declaratory relief from the invalid rulemaking of CRD, which has
`improperly adopted and is generally applying rules, regulations and/or procedural standards in
`violation of the California Administrative Procedure Act (“APA”). Cal. Gov’t Code § 11340.5(a),
`11342.600, 11349.1. These rules, regulations and/or standards constitute invalid underground
`regulations under the APA, and have been and will continue to be unlawfully applied by CRD to
`Tesla and other California employers absent the relief requested herein.
`2.
`CRD has subverted and continues to subvert the statutory and regulatory framework
`of the California Fair Employment and Housing Act (“FEHA”), Cal. Gov’t Code § 12940, et seq.,
`with its own ultra vires rules of procedure. CRD’s underground regulations unlawfully permit it to
`(a) initiate employer investigations without disclosing the factual bases for such investigations, (b)
`issue “cause” determinations against employers without providing any information in support of
`those determinations, (c) file civil suits against employers without first engaging in good faith
`conciliation and mediation, (d) file civil suits against employers on claims not previously
`investigated and/or concerning which the employers were provided no pre-suit notice, and (e)
`demand that employers waive their legal rights and protections as a condition precedent for CRD’s
`performing its statutorily required acts, including conciliation and mediation.
`PARTIES
`3.
`Tesla is an electric vehicle and clean energy company founded in California. Tesla
`employs over 20,000 workers at its facility in Fremont, California—the last remaining auto
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`400 South Hope Street, 8th Floor
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`Holland & Knight LLP
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`manufacturing plant in the state. While other manufacturers have left California for less expensive
`and less restrictive locales, Tesla is proud to provide high-paying jobs that equip Californians with
`valuable skills and training, as well as an opportunity to share in the ownership of the company
`through stock incentives at all levels.
`4.
`Tesla values and has invested in the Fremont community, its Fremont facility, and its
`workforce. Those investments include substantial commitments to diversity, inclusion, and
`community outreach, which may account for the Fremont facility’s majority-minority workforce
`(i.e., the majority of employees are from historically underrepresented backgrounds). Providing
`these opportunities and investing in Fremont benefits not only Tesla’s workers but also Tesla and,
`more broadly, the state.
`5.
`CRD is the state agency charged with protecting Californians from employment
`discrimination, including through its administration and enforcement of the FEHA. Cal. Gov’t Code
`§ 12940, et seq.; see also About CRD, https://calcivilrights.ca.gov/aboutdfeh/. Historically, CRD
`assisted workers and employers alike by serving as a neutral agency responsible for investigating
`and resolving complaints—reserving litigation for only the most severe situations of employer
`malfeasance. Indeed, the legislative history of Assembly Bill 738, which first assigned the Division
`of Fair Employment Practices (a predecessor agency to CRD) with responsibility for investigating
`and conciliating employment complaints, described the goal of the Legislature “to build as much due
`process as possible so that all parties to a complaint are protected from capricious or arbitrary
`action.”1 Unfortunately, CRD (or a segment thereof) has abandoned these founding principles in
`recent years, as evidenced by the unlawful underground rulemaking described herein.
`JURISDICTION AND VENUE
`6.
`Tesla has performed all conditions precedent to the filing of the Cross-Complaint, to
`the extent any such conditions exist. The Court’s jurisdiction is invoked pursuant to Sections 1060
`(Declaratory Relief) and 1094.5 (Writ of Mandate) of the CCP. Venue in Alameda County is proper
`under Sections 395 and 401 of the CCP.
`
`
`1 See Request for Judicial Notice in Support of Defendant Tesla Inc.’s Motion to Stay, Exhibit A (excerpts from
`legislative history of AB 738).
`
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`Holland & Knight LLP
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`
`GOVERNING LAW
`7.
`The APA broadly defines a “regulation” as “every rule, regulation, order, or standard
`of general application…adopted by any state agency to implement, interpret, or make specific the
`law enforced or administered by it or to govern its procedure.” Cal. Gov’t Code § 11342.600.
`Under this expansive definition, any general rule or guideline intended to govern how an agency
`carries out its statutory obligations qualifies as a regulation subject to the APA. See Malaga Cnty.
`Water Dist. v. Cent. Valley Reg’l Water Quality Control Bd., 58 Cal. App. 5th 418, 436 (2020) (“[A]
`regulation under the APA is any order or standard of general application by any state agency to
`govern its procedure.”). A regulation need not be in writing in order to be subject to the APA. See
`Morning Star Co. v. State Bd. of Equalization, 38 Cal. 4th 324, 336 (2006) (“We decline to endorse
`an approach that would allow an agency to avoid APA requirements simply by driving its
`regulations further underground [by failing to put them in writing].”).
`8.
`In order for a regulation to be promulgated in compliance with the APA, the proposed
`regulation must be published along with the state agency’s statement of reasons for the regulation.
`Cal. Gov’t Code § 11346.2(a)(b), 11346.4. In addition, the agency must solicit and provide the
`opportunity for public comment on the proposed regulation. Id. § 11346.8. The agency must
`respond in writing to any public comment and also hold a public hearing on the proposed regulation.
`Id. The agency must transmit the rulemaking record (i.e., its record of compliance with the APA) to
`the California Office of Administrative Law (“OAL”), file a copy of the regulation with the
`California Secretary of State, and post the regulation on its website. Cal. Gov’t Code § 11343(a),
`(c)(1), 11347.3(c). Any failure by the agency to comply with the requirements of the APA in
`promulgating a regulation renders the regulation invalid and unenforceable. See Vasquez v. Dep’t of
`Pesticide Regul., 68 Cal. App. 5th 672, 684 (2021) (“[A]ny regulation not properly adopted under
`the APA is considered invalid.” (quoting Reilly v. Superior Ct., 57 Cal. 4th 641, 649 (2013)).
`9.
`Although CRD has statutory authority “[t]o adopt, promulgate, amend, and rescind
`suitable procedural rules and regulations to carry out [its] investigation, prosecution, and dispute
`resolution duties,” it must do so in compliance with the APA, and no exemption from that
`requirement exists under California law. Cal. Gov’t Code §§ 11340.5, 12930(e).
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`Holland & Knight LLP
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`10.
`CRD is invested with certain administrative, investigative, conciliatory and
`prosecutorial powers under the FEHA. Cal. Gov’t Code § 12930(f)(1). The FEHA, however, sets
`limits and imposes obligations on CRD regarding the use and timing of those powers. This statutory
`framework is intended to serve the “vital policy interests [of the] FEHA, i.e., the resolution of
`disputes and elimination of unlawful employment practices by conciliation.” Yurick v. Superior Ct.,
`209 Cal. App. 3d 1116, 1123 (1989).
`11.
`For example, the FEHA grants CRD the administrative authority to receive or prepare
`administrative complaints of unlawful discrimination against employers, but requires such
`complaints to “set forth the particulars” of the alleged unlawful conduct and be “served” on the
`employers alleged to have engaged in that conduct. Cal. Gov’t Code §§ 12960, 12961, 12962. The
`FEHA’s requirement that CRD provide employers written notice of the “particulars” of their alleged
`discriminatory conduct is intended to give employers a meaningful opportunity to respond to the
`allegations, establish the relevant parameters of any CRD investigation, ensure due process, and
`ultimately facilitate the statutory conciliation process intended to resolve issues without the need for
`litigation.
`12.
`The FEHA also requires CRD to “make prompt investigation in connection []with”
`the “particulars” identified in the administrative complaint of discrimination. Cal. Gov’t Code §
`12963. CRD’s investigative powers are thus broad but not unlimited. Those powers are constrained
`in terms of timing (investigations must be “prompt”) and subject matter (investigations must be
`conducted “in connection []with” the allegations set forth in the administrative complaint).
`13.
`If upon concluding an investigation CRD determines that there is merit to one or
`more of the allegations of discrimination made against an employer in an administrative complaint,
`CRD’s well established practice is to issue what is known as a “Cause Finding.” A Cause Finding
`consists of written notice to the employer of CRD’s post-investigative determination regarding the
`merits of the complaint. The purpose of the Cause Finding is to ensure due process and inform and
`facilitate CRD’s statutory obligation to “immediately endeavor to eliminate the unlawful
`employment practice complained of by conference, conciliation, and persuasion.” Cal. Gov’t Code
`§ 12963.7; see also Cal. Code Regs., tit. 2, § 10057(d) (“After an investigation finds reason to
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`believe that discrimination has occurred or is about to occur, and prior to filing a civil action, [CRD]
`shall require the parties to participate in mandatory dispute resolution in an effort to resolve the
`dispute without litigation.”).
`14.
`Although the FEHA grants CRD authority to initiate civil litigation against employers
`for alleged discriminatory conduct, CRD may file suit only after it has complied with all of the
`statutory pre-suit obligations imposed on it by the FEHA and engaged in a “mandatory dispute
`resolution process” through the DFEH’s internal mediation division. Cal. Code Regs., tit. 2, §
`10057(d); see also Okoli v. Lockheed Tech. Operations Co., 36 Cal. App. 4th 1607, 1617 (1995)
`(exhaustion of administrative remedies under the FEHA is a jurisdictional prerequisite to bringing a
`civil lawsuit under the Act).
`
`RELEVANT FACTS
`15.
`CRD has adopted rules of legal interpretation and procedure to govern its conduct in
`carrying out its statutory pre-suit obligations under the FEHA, and done so in violation of the APA.
`These illegal rules make a mockery of the FEHA’s statutory requirements and render those
`requirements an administrative piffle—a bureaucratic nuisance to be brushed aside by CRD with
`formulaic labels and the illusion of compliance. The result is entirely inconsistent with the
`principles of fair notice, neutral investigations, good faith conciliation, and mandatory pre-suit
`mediation embedded in the FEHA.
`16.
`CRD’s underground regulations in violation of the APA include the following:
`(a)
`CRD initiates investigations of alleged employer misconduct under the FEHA
`without providing notice to employers of the “particulars” for those investigations;
`(b)
`CRD issues Cause Findings against employers without first providing any
`information to support those determinations;
`(c)
`CRD files civil suits against employers without first engaging in good faith
`conciliation and mediation;
`(d)
`CRD files suits against employers on claims not previously investigated to
`completion or at all, and/or concerning which the employers were not provided pre-
`suit notice; and
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`CRD demands that employers waive their legal rights and protections as a
`(e)
`condition precedent for CRD’s performing its statutorily-required acts, including
`mediation.
`17.
`On June 21, 2019, CRD served the following documents on Tesla: (a) “Notice of
`Filing of Discrimination Complaint”; (b) “Complaint of Employment Discrimination”
`(“Administrative Complaint”); and (c) “Notice of Group or Systemic Investigation and Director’s
`Complaint for Group/Class Relief” (“Director’s Complaint”). In support of the Administrative
`Complaint, CRD alleges as the “PARTICULARS” that Tesla “engaged in discrimination,
`harassment and retaliation against its employees due to…race,” “failed to provide a workplace free
`of unlawful discrimination or harassment,” and “failed to take all reasonable steps to prevent
`unlawful discrimination or harassment.” The Director’s Complaint similarly alleges in conclusory
`fashion that Tesla engaged in “discriminatory practices against African American employees on the
`basis of race,” and “[s]pecifically,” that Tesla subjected such employees to “harassment on the basis
`of race,” “failed to take all reasonable steps necessary to prevent harassment from occurring,” and
`“retaliated against employees who have reported or opposed harassment on the basis of race.”
`18.
`The Administrative and Director’s Complaints both fail to name a single Tesla
`employee who purportedly experienced or engaged in racial harassment or retaliation. Neither
`complaint provides a date, location, or factual context for any alleged harassment or retaliation. This
`same lack of factual specificity applies to the “failure to prevent” discrimination or harassment
`allegations in the Complaints.
`19.
`After serving Tesla with the Administrative and Director’s Complaints, CRD
`commenced a multi-year investigation of Tesla. During that investigation, CRD requested, and
`Tesla provided, a range of documents, including organization charts; employee handbooks; policies
`and training materials on harassment, discrimination and retaliation; documents regarding the
`employment of certain identified individuals; documents regarding internal complaints of race
`discrimination; Tesla’s agreements with staffing agencies; and a map of Tesla’s factory in Fremont.
`CRD did not request any employee compensation data or information about employee work
`assignments.
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`
`20.
`Tesla is informed and believes and thereon alleges that during its pre-suit
`investigation of Tesla, CRD did not interview any members of Tesla’s management (some of whom
`were accused of race discrimination), or any members of Tesla’s HR or Employee Relations teams
`(the units responsible for investigating employee concerns and complaints). CRD also never
`physically inspected Tesla’s Fremont facility to observe working conditions in real time, to
`understand how work schedules and job rotations operated in the facility, or to view where
`employees are stationed. For almost three years while CRD conducted its investigation, CRD never
`communicated to Tesla any concerns about ongoing race harassment or discrimination at the
`Fremont plant.
`21.
`On January 3, 2022, CRD served Tesla with a one-page Cause Finding, advising that
`“[b]ased on the evidence CRD has collected during its investigation, DFEH has reason to file a civil
`complaint in this matter against Tesla, Inc.” The Cause Finding provides no additional information
`regarding CRD’s charges of misconduct against Tesla, and fails to provide any facts or describe any
`“evidence” to justify CRD’s finding or to support CRD’s conclusion that it has “reason” to sue
`Tesla.
`
`22.
`On February 9, 2022, CRD filed the civil complaint that commenced this lawsuit. On
`March 11, 2022, CRD filed the FAC. The FAC asserts 13 causes of action based on “claims for
`unlawful race harassment; race discrimination in terms and condition [sic] of employment (including
`assignment, compensation, discipline, promotion, termination, constructive discharge); retaliation;
`failure to prevent discrimination, harassment and retaliation; unequal pay; waiver of rights, forums,
`or procedures and release of claims; and recordkeeping violations.” (FAC ¶ 14.)
`23.
`A comparison of the allegations of unlawful conduct set forth in the Administrative
`and Director’s Complaints with the allegations and 13 causes of action asserted in the FAC makes
`clear that the unlawful conduct in the FAC far exceeds the “PARTICULARS” identified by CRD in
`the Administrative and Director’s Complaints. Neither of those Complaints contain any allegations
`or otherwise mention Tesla’s purported discriminatory “assignment,” “compensation,” “discipline,”
`“promotion,” “termination,” “constructive discharge,” “unequal pay,” and/or imposition of a “waiver
`or rights” with respect to African American employees, or Tesla’s failure to maintain or produce any
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`“records.” These allegations appear for the first time in the FAC in connection with the Second,
`Third, Fourth, Fifth, Sixth, Seventh, Eleventh, Twelfth, and Thirteenth Causes of Action. CRD thus
`failed to provide Tesla any pre-suit notice of these claims and theories of recovery, and did so
`consistent with the underground regulation CRD has adopted that no such notice is required.
`24.
`The same is true with respect to the First (Harassment), Eighth (Retaliation), and
`Ninth and Tenth (Failure to Prevent Discrimination/Harassment) Causes of Action. Although the
`labels of “harassment,” “retaliation” and “failure to prevent” do appear in the Administrative and
`Director’s Complaints, there are no supporting factual allegations in those Complaints giving Tesla
`fair notice of the “particulars” of its alleged unlawful conduct. Once more, a comparison of the
`allegations of the FAC with the sparse and conclusory labels used in the Administrative and
`Director’s Complaints shows that CRD did not provide Tesla with proper notice, again consistent
`with CRD’s underground regulation that no such notice is required.
`25. Within one day of receiving CRD’s Cause Finding, and in an effort to ensure that its
`statutorily-mandated mediation with CRD was meaningful, Tesla submitted a written request to
`CRD asking for the “evidentiary support and reasoning for the Department’s probable cause
`finding.” CRD refused, stating: “DFEH will discuss the evidentiary support and reasoning for its
`cause finding at the mediation.”
`26.
`On January 11, 2022, Tesla again wrote to CRD, stating that due to “Tesla’s sincere
`commitment to a meaningful opportunity to work cooperatively with DFEH to explore a sensible
`and durable resolution of the identified issues, I would ask that you further consider the two vital
`requests in my January 4, 2022 letter – a request for time and information.” CRD responded:
`“DFEH is willing to agree to mediate on the latter of your two available dates (February 8) on the
`condition that Tesla confirms that no other settlement related to the allegations in DFEH Director’s
`Complaint (DFEH Case No. 201906-06540918) will be reached before this date.” DFEH also again
`refused to provide any information about its Cause Finding prior to the mediation.
`27.
`On January 14, 2022, CRD advised Tesla that because Tesla had not “agreed to
`DFEH’s condition regarding an extension to mediate on February 8,” “a mediation will be scheduled
`for January 20, 2022.” In short, to secure a mediation on the previously agreed February 8 date,
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`DFEH required that Tesla not even “contemplate[]” or “discuss” settlement of similar claims with
`the United States Equal Employment Opportunity Commission (“EEOC”). Forced to choose
`between its statutory right to a pre-suit mediation, and its state and federal constitutional rights to
`engage in free speech and petition the federal EEOC, Tesla capitulated to the unlawful speech
`restraint.
`28.
`CRD and Tesla attended the mediation on February 8, 2022. Although CRD had
`represented to Tesla that it would provide Tesla factual support for the Cause Finding at the
`mediation, CRD failed to do so. Instead, a session that was supposed to address a multi-year
`investigation of allegations of race discrimination ended just 2.5 hours after it started. The truth is
`that CRD did not engage in meaningful conciliation efforts or good faith mediation with Tesla,
`consistent with its underground regulation that no such pre-suit obligations apply to it under the
`FEHA.
`29.
`In sum, the entire course of pre-suit conduct by CRD toward Tesla was entirely
`inimical to the statutory constraints and obligations imposed on CRD by the FEHA. CRD did not
`provide Tesla adequate notice of the “particulars” of its alleged discriminatory conduct in the
`Administrative or Director’s Complaints. CRD did not conduct a fair and neutral investigation of
`Tesla’s conduct, despite taking almost three years to complete that investigation. In fact, Tesla is
`informed and believes and thereon alleges that CRD failed to investigate fully or at all certain claims
`and theories of recovery alleged in the FAC during the pre-suit administrative proceedings. CRD
`provided Tesla with a Cause Finding completely devoid of facts or reasoning to support its
`conclusion, thus preventing CRD and Tesla from engaging in meaningful conciliation and/or
`mediation. CRD imposed improper conditions precedent to scheduling the mediation it was required
`by statute to hold, and then engaged in that mediation in a perfunctory, “check-the-box” manner.
`30.
`Tesla’s experience with CRD is not unique. To the contrary, this type of misconduct
`by CRD has become commonplace as documented in detail by the investigative news media, court
`filings in other civil cases filed by CRD, and CRD’s judicial admissions in this case. See, e.g., Matt
`Taibbi, The Lawyers Who Ate California: Part I, TK NEWS (May 14, 2019),
`https://taibbi.substack.com/p/the-lawyers-who-ate-california-part; Matt Taibbi, The Lawyers Who
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`400 South Hope Street, 8th Floor
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`Holland & Knight LLP
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`Ate California: Part II, TK NEWS (May 14, 2019), https://taibbi.substack.com/p/the-lawyers-who-
`ate-california-part-1a8; Matt Taibbi, The Lawyers Who Ate California: Epilogue, TK NEWS (May
`19, 2019), https://taibbi.substack.com/p/the-lawyers-who-ate-california-epilogue. In violation of the
`APA, CRD is using rules, regulations and/or standards of conduct of general application to interpret
`and make specific certain provisions of the FEHA, including those provisions governing CRD’s pre-
`suit obligations. The pattern of CRD behavior experienced by Tesla reflects standards of conduct
`that Tesla is informed and believes and thereon alleges are and have been applied generally by CRD
`to other California employers. Such conduct constitutes invalid underground rulemaking under the
`APA. Cal. Gov’t Code § 11342.600; see also Tidewater Marine W. Inc. v. Bradshaw, 14 Cal. 4th
`557, 568 (1996); Morning Star Co., 38 Cal. 4th at 336.
`31.
`Recent court filings in a civil suit brought by CRD against another employer confirm
`that the CRD rules and standards of procedure that Tesla experienced and now challenges through
`this Cross-Complaint are generally applied by CRD against other California employers. See Dep’t
`of Fair Emp. & Housing v. Activision, Inc., et al., Los Angeles County Superior Court Case No.
`21STCV26571 (“Activision Case”). A dispositive motion filed in the Activision Case on May 6,
`2022, details how CRD applied rules and procedural standards identical to those challenged herein to
`Activision in a completely separate and unrelated proceeding. Specifically, CRD (1) failed to
`investigate or complete its investigation of administrative claims of discrimination against Activision
`prior to filing suit on those claims; (2) issued a Cause Finding against Activision that did not provide
`any supportive information, thus making conciliation and mediation a sham process; (3) imposed
`improper conditions precedent to mediation on Activision, including the waiver of certain legal
`rights; (4) failed to engage in good faith conciliation and mediation as required by statute and public
`policy, but rather treated those pre-suit obligations as “check-the-box” nuisances; and (5) filed a civil
`suit against Activision on claims not identified or otherwise asserted during the pre-suit
`administrative process. Similar examples of CRD’s applying rules and procedural standards in
`violation of the APA and at odds with the FEHA have been documented in detail by the news media.
`See Taibbi Article, supra.
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`Holland & Knight LLP
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`32.
`The identical experiences and treatment of Tesla and Activision by CRD reflect
`CRD’s interpretation of its powers under the FEHA, and the agency’s general application of those
`procedural practices to employers in California. CRD concedes as much in defending its pre-suit
`conduct in this case and the Activision Case, by asserting what can only be described as an
`unfettered power to conduct itself as it alone sees fit. Specifically, CRD has sought to justify in
`court filings in this case and the Activision Case its right to issue factually-barren Cause Findings,
`impose whatever limits on the conciliation process it deems appropriate, engage in hasty and
`perfunctory mediations, and file civil suits on claims and based on allegations that far exceed the
`“particulars” of discrimination identified during the pre-suit administrative process. In thus
`attempting to justify its misconduct toward Tesla and Activision, CRD has implicitly acknowledged
`that this misconduct reflects CRD’s interpretation of its power and authority as applied generally to
`employers, and will continue to govern its procedures in administering and enforcing the FEHA.
`33.
`CRD has promulgated and is generally applying the rules, regulations and/or
`procedural standards described herein without publishing the text of those rules, regulations and/or
`standards and filing that text with the Secretary of State as required by the APA. Cal. Gov’t Code §§
`11340.5(a), 11346.2(a).
`34.
`CRD has promulgated and is generally applying the rules, regulations and/or
`procedural standards described herein without first issuing a notice of proposed rulemaking as
`required by the APA. Cal. Gov’t Code §§ 11346.2(a), 11346.4.
`35.
`CRD has promulgated and is gene